U.S. Now Says It’s Prepared to Back Housing Loan Guarantees for Israel

The Bush administration has agreed to provide Israel with $400 million in housing loan guarantees, as long as the money is not used to build housing for Soviet immigrants in the West Bank or Gaza Strip.

That condition is softer than one Secretary of State James Baker stated last Thursday, when he told a congressional panel that Israel might not receive the loan guarantees unless it agreed not to increase the number of settlements in the administered territories or expand the size of existing ones.

“I don’t think it’s unreasonable for us to ask for some assurances that these funds will not be used to create new settlements or expand old settlements in the occupied territories,” Baker was quoted as telling the House Appropriations subcommittee on foreign operations.

His comments reportedly stunned officials in Israel, who interpreted the remarks as forcing Israel to choose between curtailing settlement of the territories and receiving U.S. funds to build housing for Soviet Jews.

The remarks also disturbed American Jewish leaders. In New York, Sidney Silverman, national president of the Zionist Organization of America, wrote a letter to President Bush on Friday, saying, “To infer that financial support would be forthcoming, providing Israel stops Jewish settlements, is a policy which we find extremely disquieting.”

On Friday afternoon, State Department spokeswoman Margaret Tutwiler announced that Baker had telephoned Israeli Prime Minister Yitzhak Shamir and told him the United States would support the loan guarantees, provided it received assurances that none of the money would be used in the West Bank or Gaza Strip.

Similar conditions are placed on all U.S. aid to Israel.

On Feb 8, Sens. Patrick Leahy (D-Vt.) and Robert Kasten (R-Wis.), chairman and ranking Republican on the Senate Appropriations subcommittee on foreign operations, introduced a bill that would provide guarantees for $400 million of housing loans, but no action has been taken on the measure.

An official of a Jewish agency that assists Soviet Jews said the senators hope to attach the amendment to 1990 supplemental appropriations bills for Soviet refugees and Panama. The activist said those bills are not expected to be voted on by the Senate until late April.

U.S. CONDEMNS ARAB CAMPAIGN

In her remarks Friday, Tutwiler said, “We draw a very clear distinction between the absorption of Soviet Jews into Israel and their settlement in the territories.”

She said Baker “made clear” to Shamir that “we strongly support the emigration of Soviet Jews to Israel.”

“We will do all to promote and facilitate the exit of Soviet Jews wishing to emigrate to Israel,” Tutwiler added. “Their emigration to Israel is something we welcome and support.”

The State Department spokeswoman also took the opportunity to condemn attempts by Arab governments to curtail Soviet Jewish immigration to Israel, as Baker has done in recent congressional testimony.

“Efforts to stop such emigration, to mobilize international opinion to oppose such emigration, are wrong,” Tutwiler said.

But at the same time, she said, the United States regards Jewish settlements “as an obstacle to peace.”